10-Q 1 form10q.htm QUARTERLY REPORT

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___  to  ___.

Commission file number:  1-14323

ENTERPRISE PRODUCTS PARTNERS L.P.
(Exact Name of Registrant as Specified in Its Charter)

Delaware
 
 
76-0568219
(State or Other Jurisdiction of Incorporation or Organization)
 
 
(I.R.S. Employer Identification No.)
 
1100 Louisiana Street, 10th Floor
Houston, Texas 77002
    (Address of Principal Executive Offices, including Zip Code)
(713) 381-6500
(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of Each Class
Trading Symbol(s)
Name of Each Exchange On Which Registered
Common Units
EPD
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ☑  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer 
Accelerated filer
Non-accelerated filer   
Smaller reporting company
Emerging growth company   
 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes    No  

There were 2,171,558,354 common units of Enterprise Products Partners L.P. outstanding at the close of business on April 30, 2024. 


ENTERPRISE PRODUCTS PARTNERS L.P.
TABLE OF CONTENTS

 
 
Page No.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

PART I.  FINANCIAL INFORMATION.

ITEM 1.  FINANCIAL STATEMENTS.

ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)

   
March 31,
2024
   
December 31,
2023
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
 
$
283
   
$
180
 
Restricted cash
   
101
     
140
 
Accounts receivable – trade, net of allowance for credit losses
of $35 at March 31, 2024 and December 31, 2023
   
7,592
     
7,765
 
Accounts receivable – related parties
   
6
     
7
 
Inventories (see Note 3)
   
3,257
     
3,352
 
Derivative assets (see Note 13)
   
323
     
347
 
Prepaid and other current assets
   
531
     
457
 
Total current assets
   
12,093
     
12,248
 
Property, plant and equipment, net (see Note 4)
   
46,431
     
45,804
 
Investments in unconsolidated affiliates (see Note 5)
   
2,321
     
2,330
 
Intangible assets, net (see Note 6)
   
3,720
     
3,770
 
Goodwill (see Note 6)
   
5,608
     
5,608
 
Other assets
   
1,200
     
1,222
 
Total assets
 
$
71,373
   
$
70,982
 
 
               
LIABILITIES AND EQUITY
               
Current liabilities:
               
Current maturities of debt (see Note 7)
 
$
1,149
   
$
1,300
 
Accounts payable – trade
   
1,372
     
1,195
 
Accounts payable – related parties
   
82
     
199
 
Accrued product payables
   
9,297
     
8,911
 
Accrued interest
   
254
     
455
 
Derivative liabilities (see Note 13)
   
332
     
396
 
Other current liabilities
   
544
     
675
 
Total current liabilities
   
13,030
     
13,131
 
Long-term debt (see Note 7)
   
28,285
     
27,448
 
Deferred tax liabilities (see Note 15)
   
620
     
611
 
Other long-term liabilities
   
912
     
984
 
Commitments and contingent liabilities (see Note 16)
   
     
 
Redeemable preferred limited partner interests: (see Note 8)
               
    Series A cumulative convertible preferred units (“preferred units”)
        (50,412 units outstanding at March 31, 2024 and December 31, 2023)
   
49
     
49
 
Equity: (see Note 8)
               
Partners’ equity:
               
Common limited partner interests (2,171,558,354 units issued and outstanding at
     March 31, 2024, 2,168,245,238 units issued and outstanding at December 31, 2023)
   
28,831
     
28,663
 
Treasury units, at cost
   
(1,297
)
   
(1,297
)
Accumulated other comprehensive income
   
143
     
307
 
Total partners’ equity
   
27,677
     
27,673
 
Noncontrolling interests in consolidated subsidiaries
   
800
     
1,086
 
Total equity
   
28,477
     
28,759
 
Total liabilities, preferred units, and equity
 
$
71,373
   
$
70,982
 


See Notes to Unaudited Condensed Consolidated Financial Statements.


ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
 (Dollars in millions, except per unit amounts)

 
 
For the Three Months
Ended March 31,
 
 
 
2024
   
2023
 
Revenues:
           
Third parties
 
$
14,745
   
$
12,431
 
Related parties
   
15
     
13
 
Total revenues (see Note 9)
   
14,760
     
12,444
 
Costs and expenses:
               
Operating costs and expenses:
               
Third party and other costs
   
12,591
     
10,432
 
Related parties
   
383
     
325
 
Total operating costs and expenses
   
12,974
     
10,757
 
General and administrative costs:
               
Third party and other costs
   
22
     
23
 
Related parties
   
44
     
34
 
Total general and administrative costs
   
66
     
57
 
Total costs and expenses (see Note 10)
   
13,040
     
10,814
 
Equity in income of unconsolidated affiliates
   
102
     
104
 
Operating income
   
1,822
     
1,734
 
Other income (expense):
               
Interest expense
   
(331
)
   
(314
)
Interest income
   
13
     
12
 
Total other expense, net
   
(318
)
   
(302
)
Income before income taxes
   
1,504
     
1,432
 
Provision for income taxes (see Note 15)
   
(21
)
   
(10
)
Net income
   
1,483
     
1,422
 
Net income attributable to noncontrolling interests
   
(26
)
   
(31
)
Net income attributable to preferred units
   
(1
)
   
(1
)
Net income attributable to common unitholders
 
$
1,456
   
$
1,390
 
 
               
Earnings per unit: (see Note 11)
               
Basic and diluted earnings per common unit
 
$
0.66
   
$
0.63
 

















See Notes to Unaudited Condensed Consolidated Financial Statements.

ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED
COMPREHENSIVE INCOME
(Dollars in millions)

 
 
For the Three Months
Ended March 31,
 
 
 
2024
   
2023
 
 
           
Net income
 
$
1,483
   
$
1,422
 
Other comprehensive income (loss):
               
Cash flow hedges: (see Note 13)
               
Commodity hedging derivative instruments:
               
Changes in fair value of cash flow hedges
   
(162
)
   
(89
)
Reclassification of gains to net income
   
(2
)
   
(32
)
Interest rate hedging derivative instruments:
               
Changes in fair value of cash flow hedges
   
2
     
(5
)
Reclassification of losses (gains) to net income
   
(2
)
   
2
 
Total cash flow hedges
   
(164
)
   
(124
)
Total other comprehensive loss
   
(164
)
   
(124
)
Comprehensive income
   
1,319
     
1,298
 
Comprehensive income attributable to noncontrolling interests
   
(26
)
   
(31
)
Comprehensive income attributable to preferred units
   
(1
)
   
(1
)
Comprehensive income attributable to common unitholders
 
$
1,292
   
$
1,266
 





























See Notes to Unaudited Condensed Consolidated Financial Statements.


ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Dollars in millions)

 
 
For the Three Months
Ended March 31,
 
 
 
2024
   
2023
 
Operating activities:
           
Net income
 
$
1,483
   
$
1,422
 
Reconciliation of net income to net cash flows provided by operating activities:
               
Depreciation and accretion
   
488
     
454
 
Amortization of intangible assets
   
50
     
46
 
Amortization of major maintenance costs for reaction-based plants
   
13
     
14
 
Other amortization expense
   
65
     
53
 
Impairment of assets other than goodwill
   
20
     
13
 
Equity in income of unconsolidated affiliates
   
(102
)
   
(104
)
Distributions received from unconsolidated affiliates attributable to earnings
   
97
     
104
 
Net gains attributable to asset sales and related matters
   
     
(2
)
Deferred income tax expense
   
9
     
3
 
Change in fair market value of derivative instruments
   
4
     
3
 
Non-cash expense related to long-term operating leases (see Note 16)
   
20
     
16
 
Net effect of changes in operating accounts (see Note 17)
   
(36
)
   
(439
)
Net cash flows provided by operating activities
   
2,111
     
1,583
 
Investing activities:
               
Capital expenditures
   
(1,047
)
   
(653
)
Distributions received from unconsolidated affiliates attributable to the return of capital
   
15
     
15
 
Proceeds from asset sales and other matters
   
2
     
2
 
Other investing activities
   
(8
)
   
(1
)
Cash used in investing activities
   
(1,038
)
   
(637
)
Financing activities:
               
Borrowings under debt agreements
   
14,328
     
8,321
 
Repayments of debt
   
(13,632
)
   
(8,018
)
Debt issuance costs
   
(18
)
   
(17
)
Monetization of interest rate derivative instruments
   
(29
)
   
21
 
Cash distributions paid to common unitholders (see Note 8)
   
(1,117
)
   
(1,064
)
Cash payments made in connection with distribution equivalent rights
   
(10
)
   
(9
)
Cash distributions paid to noncontrolling interests
   
(38
)
   
(42
)
Cash contributions from noncontrolling interests
   
8
     
4
 
Repurchase of common units under 2019 Buyback Program
   
(40
)
   
(17
)
Acquisition of noncontrolling interests
   
(400
)
   
 
Other financing activities
   
(61
)
   
(55
)
Cash used in financing activities
   
(1,009
)
   
(876
)
Net change in cash and cash equivalents, including restricted cash
   
64
     
70
 
Cash and cash equivalents, including restricted cash, at beginning of period
   
320
     
206
 
Cash and cash equivalents, including restricted cash, at end of period
 
$
384
   
$
276
 









See Notes to Unaudited Condensed Consolidated Financial Statements.


ENTERPRISE PRODUCTS PARTNERS L.P.
UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED EQUITY
(Dollars in millions)

 
 
Partners’ Equity
             
   
Common
Limited
Partner
Interests
   
Treasury
Units
   
Accumulated
Other
Comprehensive
Income (Loss)
   
Noncontrolling
Interests in
Consolidated
Subsidiaries
   
Total
 
Balance, December 31, 2023
 
$
28,663
   
$
(1,297
)
 
$
307
   
$
1,086
   
$
28,759
 
   Net income
   
1,456
     
     
     
26
     
1,482
 
   Cash distributions paid to common unitholders
   
(1,117
)
   
     
     
     
(1,117
)
   Cash payments made in connection with distribution equivalent rights
   
(10
)
   
     
     
     
(10
)
   Cash distributions paid to noncontrolling interests
   
     
     
     
(38
)
   
(38
)
   Cash contributions from noncontrolling interests
   
     
     
     
8
     
8
 
   Repurchase and cancellation of common units under 2019 Buyback Program
   
(40
)
   
     
     
     
(40
)
   Amortization of fair value of equity-based awards
   
56
     
     
     
     
56
 
   Acquisition of noncontrolling interests
   
(118
)
   
     
     
(282
)
   
(400
)
   Cash flow hedges
   
     
     
(164
)
   
     
(164
)
   Other, net
   
(59
)
   
     
     
     
(59
)
Balance, March 31, 2024
 
$
28,831
   
$
(1,297
)
 
$
143
   
$
800
   
$
28,477
 



 
 
Partners’ Equity
             
   
Common
Limited
Partner
Interests
   
Treasury
Units
   
Accumulated
Other
Comprehensive
Income (Loss)
   
Noncontrolling
Interests in
Consolidated
Subsidiaries
   
Total
 
Balance, December 31, 2022
 
$
27,555
   
$
(1,297
)
 
$
365
   
$
1,079
   
$
27,702
 
   Net income
   
1,390
     
     
     
31
     
1,421
 
   Cash distributions paid to common unitholders
   
(1,064
)
   
     
     
     
(1,064
)
   Cash payments made in connection with distribution equivalent rights
   
(9
)
   
     
     
     
(9
)
   Cash distributions paid to noncontrolling interests
   
     
     
     
(42
)
   
(42
)
   Cash contributions from noncontrolling interests
   
     
     
     
4
     
4
 
   Repurchase and cancellation of common units under 2019 Buyback Program
   
(17
)
   
     
     
     
(17
)
   Amortization of fair value of equity-based awards
   
41
     
     
     
     
41
 
   Cash flow hedges
   
     
     
(124
)
   
     
(124
)
   Other, net
   
(53
)
   
     
     
     
(53
)
Balance, March 31, 2023
 
$
27,843
   
$
(1,297
)
 
$
241
   
$
1,072
   
$
27,859
 


















See Notes to Unaudited Condensed Consolidated Financial Statements.  For information regarding Unit History,
Accumulated Other Comprehensive Income (Loss), see Note 8.

6


ENTERPRISE PRODUCTS PARTNERS L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

KEY REFERENCES USED IN THESE
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unless the context requires otherwise, references to “we,” “us” or “our” within these Notes to Unaudited Condensed Consolidated Financial Statements are intended to mean the business and operations of Enterprise Products Partners L.P. and its consolidated subsidiaries.  

References to the “Partnership” or “Enterprise” mean Enterprise Products Partners L.P. on a standalone basis.

References to “EPO” mean Enterprise Products Operating LLC, which is an indirect wholly owned subsidiary of the Partnership, and its consolidated subsidiaries, through which the Partnership conducts its business.  We are managed by our general partner, Enterprise Products Holdings LLC (“Enterprise GP”), which is a wholly owned subsidiary of Dan Duncan LLC, a privately held Texas limited liability company.

The membership interests of Dan Duncan LLC are owned by a voting trust, the current trustees (“DD LLC Trustees”) of which are: (i) Randa Duncan Williams, who is also a director and Chairman of the Board of Directors of Enterprise GP (the “Board”);  (ii) Richard H. Bachmann, who is also a director and Vice Chairman of the Board; and (iii) W. Randall Fowler, who is also a director and a Co-Chief Executive Officer of Enterprise GP.  Ms. Duncan Williams and Messrs. Bachmann and Fowler also currently serve as managers of Dan Duncan LLC.

References to “EPCO” mean Enterprise Products Company, a privately held Texas corporation, and its privately held affiliates.  The outstanding voting capital stock of EPCO is owned by a voting trust, the current trustees (“EPCO Trustees”) of which are: (i) Ms. Duncan Williams, who serves as Chairman of EPCO; (ii) Mr. Bachmann, who serves as the President and Chief Executive Officer of EPCO; and (iii) Mr. Fowler, who serves as an Executive Vice President and the Chief Financial Officer of EPCO.  Ms. Duncan Williams and Messrs. Bachmann and Fowler also currently serve as directors of EPCO.

We, Enterprise GP, EPCO and Dan Duncan LLC are affiliates under the collective common control of the DD LLC Trustees and the EPCO Trustees.  EPCO, together with its privately held affiliates, owned approximately 32.3% of the Partnership’s common units outstanding at March 31, 2024.

With the exception of per unit amounts, or as noted within the context of each disclosure,
the dollar amounts presented in the tabular data within these disclosures are
stated in millions of dollars.

7


ENTERPRISE PRODUCTS PARTNERS L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Partnership Organization and Operations

We are a publicly traded Delaware limited partnership, the common units of which are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “EPD.”  Our preferred units are not publicly traded.  We were formed in April 1998 to own and operate certain natural gas liquids (“NGLs”) related businesses of EPCO and are a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, petrochemicals and refined products.  We are owned by our limited partners (preferred and common unitholders) from an economic perspective.  Enterprise GP, which owns a non-economic general partner interest in us, manages our Partnership.  We conduct substantially all of our business operations through EPO and its consolidated subsidiaries.

Our fully integrated, midstream energy asset network (or “value chain”) links producers of natural gas, NGLs and crude oil from some of the largest supply basins in the United States (“U.S.”), Canada and the Gulf of Mexico with domestic consumers and international markets.  Our midstream energy operations include:

natural gas gathering, treating, processing, transportation and storage;

NGL transportation, fractionation, storage, and marine terminals (including those used to export liquefied petroleum gases (“LPG”) and ethane);

crude oil gathering, transportation, storage, and marine terminals;

propylene production facilities (including propane dehydrogenation (“PDH”) facilities), butane isomerization, octane enhancement, isobutane dehydrogenation (“iBDH”) and high purity isobutylene (“HPIB”) production facilities;

petrochemical and refined products transportation, storage, and marine terminals (including those used to export ethylene and polymer grade propylene (“PGP”)); and

a marine transportation business that operates on key U.S. inland and intracoastal waterway systems. 

Like many publicly traded partnerships, we have no employees.  All of our management, administrative and operating functions are performed by employees of EPCO pursuant to an administrative services agreement (the “ASA”) or by other service providers.  See Note 14 for information regarding related party matters.

Our results of operations for the three months ended March 31, 2024 are not necessarily indicative of results expected for the full year of 2024.  In our opinion, the accompanying Unaudited Condensed Consolidated Financial Statements include all adjustments consisting of normal recurring accruals necessary for fair presentation.  Although we believe the disclosures in these financial statements are adequate and make the information presented not misleading, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).

These Unaudited Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with the Audited Consolidated Financial Statements and Notes thereto included in our annual report on Form 10-K for the year ended December 31, 2023  (the “2023 Form 10-K”) filed with the SEC on February 28, 2024.




8


ENTERPRISE PRODUCTS PARTNERS L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2.  Summary of Significant Accounting Policies

Apart from those matters described in this footnote, there have been no updates to our significant accounting policies since those reported under Note 2 of the 2023 Form 10-K.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the Unaudited Condensed Consolidated Balance Sheets that sum to the total of the amounts shown in the Unaudited Condensed Statements of Consolidated Cash Flows.

   
March 31,
2024
   
December 31,
2023
 
Cash and cash equivalents
 
$
283
   
$
180
 
Restricted cash
   
101
     
140
 
Total cash, cash equivalents and restricted cash shown in the
  Unaudited Condensed Statements of Consolidated Cash Flows
 
$
384
   
$
320
 

Restricted cash primarily represents amounts held in segregated bank accounts by our clearing brokers as margin in support of our commodity derivative instruments portfolio and related physical purchases and sales of natural gas, NGLs, crude oil, refined products and power.  Additional cash may be restricted to maintain our commodity derivative instruments portfolio as prices fluctuate or margin requirements change.  See Note 13 for information regarding our derivative instruments and hedging activities.


Note 3.  Inventories

Our inventory amounts by product type were as follows at the dates indicated:

   
March 31,
2024
   
December 31,
2023
 
NGLs
 
$
2,157
   
$
2,392
 
Petrochemicals and refined products
   
345
     
536
 
Crude oil
   
752
     
419
 
Natural gas
   
3
     
5
 
Total
 
$
3,257
   
$
3,352
 

Due to fluctuating commodity prices, we recognize lower of cost or net realizable value adjustments when the carrying value of our available-for-sale inventories exceeds their net realizable value.  The following table presents our total cost of sales amounts and lower of cost or net realizable value adjustments for the periods indicated:

 
For the Three Months
Ended March 31,
 
 
2024
 
2023
 
Cost of sales (1)
 
$
11,405
   
$
9,331
 
Lower of cost or net realizable value adjustments recognized in cost of sales
   
1
     
7
 

(1)
Cost of sales is a component of “Operating costs and expenses” as presented on our Unaudited Condensed Statements of Consolidated Operations.  Fluctuations in these amounts are primarily due to changes in energy commodity prices and sales volumes associated with our marketing activities.


9


ENTERPRISE PRODUCTS PARTNERS L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 4.  Property, Plant and Equipment

The historical costs of our property, plant and equipment and related balances were as follows at the dates indicated:

 
 
Estimated
Useful Life
in Years
   
March 31,
2024
   
December 31,
2023
 
Plants, pipelines and facilities (1)(5)
   
3-45
   
$
58,900
   
$
57,983
 
Underground and other storage facilities (2)(6)
   
5-40
     
4,532
     
4,401
 
Transportation equipment (3)
   
3-10
     
250
     
242
 
Marine vessels (4)
   
15-30
     
932
     
935
 
Land
           
412
     
411
 
Construction in progress
           
2,228
     
2,245
 
   Subtotal
           
67,254
     
66,217
 
Less accumulated depreciation
           
20,931
     
20,462
 
   Subtotal property, plant and equipment, net
           
46,323
     
45,755
 
Capitalized major maintenance costs for reaction-based
   plants, net of accumulated amortization (7)
           
108
     
49
 
   Property, plant and equipment, net
         
$
46,431
   
$
45,804
 

(1)
Plants, pipelines and facilities include distillation-based and reaction-based plants; NGL, natural gas, crude oil and petrochemical and refined products pipelines; terminal loading and unloading facilities; buildings; office furniture and equipment; laboratory and shop equipment and related assets.
(2)
Underground and other storage facilities include underground product storage caverns; above ground storage tanks; water wells and related assets.
(3)
Transportation equipment includes tractor-trailer tank trucks and other vehicles and similar assets used in our operations.
(4)
Marine vessels include tow boats, barges and related equipment used in our marine transportation business.
(5)
In general, the estimated useful lives of major assets within this category are: distillation-based and reaction-based plants, 20-35 years; pipelines and related equipment, 5-45 years; terminal facilities, 10-35 years; buildings, 20-40 years; office furniture and equipment, 3-20 years; and laboratory and shop equipment, 5-35 years.
(6)
In general, the estimated useful lives of assets within this category are: underground storage facilities, 5-35 years; storage tanks, 10-40 years; and water wells, 5-35 years.
(7)
For reaction-based plants, we use the deferral method when accounting for major maintenance activities.  Under the deferral method, major maintenance costs are capitalized and amortized over the period until the next major overhaul project.  On a weighted-average basis, the expected remaining amortization period for these costs is 3.0 years.

Property, plant and equipment at March 31, 2024 and December 31, 2023 includes $108 million and $109 million, respectively, of asset retirement costs capitalized as an increase in the associated long-lived asset.

The following table presents information regarding our asset retirement obligations, or AROs, since December 31, 2023:

ARO liability balance, December 31, 2023
 
$
225
 
Liabilities incurred (1)
   
 
Revisions in estimated cash flows (2)
   
 
Liabilities settled (3)
   
 
Accretion expense (4)
   
3
 
ARO liability balance, March 31, 2024
 
$
228
 

(1)
Represents the initial recognition of estimated ARO liabilities during period.
(2)
Represents subsequent adjustments to estimated ARO liabilities during period.
(3)
Represents cash payments to settle ARO liabilities during period.
(4)
Represents net change in ARO liability balance attributable to the passage of time and other adjustments, including true-up amounts associated with revised closure estimates.

Of the $228 million total ARO liability recorded at March 31, 2024, $4 million was reflected as a current liability and $224 million as a long-term liability.
10


ENTERPRISE PRODUCTS PARTNERS L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes our depreciation expense and capitalized interest amounts for the periods indicated:

 
For the Three Months
Ended March 31,
 
 
2024
 
2023
 
Depreciation expense (1)
 
$
485
   
$
450
 
Capitalized interest (2)
   
25
     
32
 

(1)
Depreciation expense is a component of “Costs and expenses” as presented on our Unaudited Condensed Statements of Consolidated Operations.
(2)
We capitalize interest costs incurred on funds used to construct property, plant and equipment while the asset is in its construction phase.  The capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life as a component of depreciation expense.  When capitalized interest is recorded, it reduces interest expense from what it would be otherwise.


Note 5.  Investments in Unconsolidated Affiliates

The following table presents our investments in unconsolidated affiliates by business segment at the dates indicated.  We account for these investments using the equity method.

   
March 31,
2024
   
December 31,
2023
 
NGL Pipelines & Services
 
$
610
   
$
612
 
Crude Oil Pipelines & Services
   
1,674
     
1,681
 
Natural Gas Pipelines & Services
   
34
     
33
 
Petrochemical & Refined Products Services
   
3
     
4
 
Total
 
$
2,321
   
$
2,330
 

The following table presents our equity in income of unconsolidated affiliates by business segment for the periods indicated:

 
 
For the Three Months
Ended March 31,
 
 
 
2024
   
2023
 
NGL Pipelines & Services
 
$
31
   
$
39
 
Crude Oil Pipelines & Services
   
69
     
64
 
Natural Gas Pipelines & Services
   
2
     
1
 
Petrochemical & Refined Products Services
   
     
 
Total
 
$
102
   
$
104
 


11


ENTERPRISE PRODUCTS PARTNERS L.P.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 6.  Intangible Assets and Goodwill

Identifiable Intangible Assets

The following table summarizes our intangible assets by business segment at the dates indicated:

   
March 31, 2024
   
December 31, 2023
 
 
 
Gross
Value
   
Accumulated
Amortization
   
Carrying
Value
   
Gross
Value
   
Accumulated
Amortization
   
Carrying
Value
 
NGL Pipelines & Services:
                                   
Customer relationship intangibles
 
$
449
   
$
(267
)
 
$
182
   
$
449
   
$
(263
)
 
$
186
 
Contract-based intangibles
   
752
     
(116
)
   
636
     
752
     
(110
)
   
642
 
Segment total
   
1,201
     
(383
)
   
818
     
1,201
     
(373
)
   
828
 
Crude Oil Pipelines & Services:
                                               
Customer relationship intangibles
   
2,195
     
(555
)
   
1,640
     
2,195
     
(530
)
   
1,665
 
Contract-based intangibles
   
283
     
(275
)
   
8
     
283
     
(275
)
   
8
 
Segment total
   
2,478
     
(830
)
   
1,648
     
2,478
     
(805
)
   
1,673
 
Natural Gas Pipelines & Services:
                                               
Customer relationship intangibles
   
1,351
     
(634
)
   
717
     
1,351
     
(625
)
   
726
 
Contract-based intangibles
   
641
     
(213
)
   
428
     
641
     
(209
)
   
432
 
Segment total
   
1,992
     
(847
)
   
1,145
     
1,992
     
(834
)
   
1,158
 
Petrochemical & Refined Products Services:
                                               
Customer relationship intangibles
   
181
     
(87
)
   
94
     
181
     
(86
)
   
95
 
Contract-based intangibles
   
45
     
(30
)
   
15
     
45
     
(29
)
   
16
 
Segment total
   
226
     
(117
)
   
109
     
226
     
(115
)
   
111
 
Total intangible assets
 
$
5,897
   
$
(2,177
)
 
$
3,720
   
$
5,897
   
$
(2,127
)
 
$
3,770
 

The following table presents the amortization expense of our intangible assets by business segment for the periods indicated:

 
 
For the Three Months
Ended March 31,
 
 
 
2024
   
2023
 
NGL Pipelines & Services
 
$
10
   
$
9
 
Crude Oil Pipelines & Services
   
25
     
23
 
Natural Gas Pipelines & Services
   
13
     
12
 
Petrochemical & Refined Products Services
   
2
     
2
 
Total
 
$
50
   
$
46
 

The following table presents our forecast of amortization expense associated with existing intangible assets for the periods indicated:

Remainder
of 2024
   
2025
   
2026
   
2027
   
2028
 
$